Why Your Crypto Coin Is Not as Secure as You Think

Bitcoin continues to hit new highs. Cryptocurrency newcomer Ethereum threatens to explode into its own bubble. Interest in blockchain, mining, and cryptocurrency is at an all-time high.
So why are cryptocurrency enthusiasts under threat?

Securing Digital Currency

Cryptocurrency is extremely popular. The early rise and boom of Bitcoin piqued interest for casual miners and international investment firms alike. The appeal is clear: a currency with a finite reserve, decentralized, and entirely digital. Cryptocurrencies are easily associated with darknet markets — where they’re put to “good” use — but developers are shrugging that image off. Bitcoin, and the underlying blockchain technology, can do more than line the pockets of drug-dealers.


But just as fiat currency is liable to theft and fraud, so are cryptocurrencies. And the allure is greater, too.
Thievery in the real, analog world requires direct action: finding a target, making a plan, executing it, hoping authorities don’t notice. Furthermore, there is a significant chance of error, and those errors can result in immediate death (you won’t rob many banks).
Whereas cryptocurrency is faceless. It is an anonymous wallet hash that is suddenly empty. The crime is remote, and the gains are easily tumbled (the digital equivalent of washing the cash). Tracking down stolen cryptocurrency is near impossible. And you have to believe that if someone has the technical nous to hack a website, or use malware to steal a cryptocurrency wallet’s contents, they’re going to know how to cover their digital tracks.
As such, the crimes (e.g. theft, fraud) are the same. But they have different outcomes after the fact.

Only as Strong as Code

The major issue is that cryptocurrency services are only as strong as the code their built upon. Meaning, if there is an obvious vulnerability in a website, you’d better believe someone will take advantage of it.
Case in point: over $30 million in Ethereum disappears because of a coding error. Luckily, a further $75 million was recovered by vigilante white-hat hackers and returned to their rightful owners. This massive theft comes just days after an Israeli startup, CoinDash, had $7 million worth of Ethereum hijacked.

“It is unfortunate for us to announce that we have suffered a hacking attack during our Token Sale event. During the attack, $7 million were stolen by a currently unknown perpetrator. The CoinDash Token Sale secured $6.4 million from our early contributors and whitelist participants and we are grateful for your support and contribution.”

CoinDash pledged to replace the stolen coins. But as Mikko Hypponen of F-Secure states, “If they cash in (and don’t think through how to do it right) they can be found. Not holding my breath.” Confidence in finding stolen cryptocurrency is extremely low throughout the security industry.

How Do They Actually Steal the Coins?

Well, duh, Bitcoins are just 1s and 0s, right? So you find a wallet, press Ctrl + C, and voila! The coins are yours. Click here to read full article

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